SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    ________ 

                                   FORM 10-Q
(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
      EXCHANGE ACT OF 1934

                  For the quarterly period ended March 24, 1997

                                     OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from ____________ to _______________
                              
                        Commission file number 0-19649

                       Checkers Drive-In Restaurants, Inc.
             (Exact name of Registrant as specified in its charter)

                 Delaware                                 58-1654960
       (State or other jurisdiction of                 (I.R.S. employer
       incorporation or organization)                  identification no.)

       Barnett Bank Building
       600 Cleveland Street, Eighth Floor
       Clearwater, FL                                      34615
       (Address of principal executive offices)          (Zip code)

Registrant's telephone number, including area code:  (813) 441-3500

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         The Registrant had 60,540,409  shares of Common Stock,  par value $.001
per share, outstanding as of April 30, 1997.

       This document contains 25 pages. Exhibit Index appears at page 24.




<PAGE>



                                TABLE OF CONTENTS




PART I    FINANCIAL INFORMATION                                            PAGE

Item 1     Financial Statements (Unaudited)
              Condensed Consolidated Balance Sheets
                March 24, 1997 and December 30, 1996..........................3
              Condensed Consolidated Statements of Operations
                Quarter ended March 24, 1997 and March 25, 1996...............5
              Condensed Consolidated Statements of Cash Flows
                Quarter ended March 24, 1997 and March 25, 1996...............6
              Notes to Consolidated Financial Statements......................7

Item 2     Management's Discussion and Analysis of Financial Condition
            and Results of Operations........................................12



PART II    OTHER INFORMATION

Item 1     Legal Proceedings.................................................20

Item 2     Changes in Securities.............................................21

Item 3     Defaults Upon Senior Securities...................................21

Item 4     Submission of Matters to a Vote of Security Holders ..............21

Item 5     Other Information.................................................21

Item 6     Exhibits and Reports on Form 8-K..................................22





















                                        2

<PAGE>


PART I.    FINANCIAL INFORMATION

Item 1.     Financial Statements (Unaudited)


                          CHECKERS DRIVE-IN RESTAURANTS, INC.
                                    AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (Dollars in thousands)
                                         ASSETS

<TABLE>
<CAPTION>
                                                                          (Unaudited)
                                                                            March 24,   December 30,
                                                                              1997          1996
                                                                       -----------------------------
<S>                                                                        <C>             <C>  
Current Assets:                                                  
                                                                 
Cash and cash equivalents:                                       
     Restricted                                                             $   1,859      $   1,505
     Unrestricted                                                               1,592          1,551
Accounts receivable                                                             1,900          1,544
Notes receivable                                                                  362            214
Inventory                                                                       2,004          2,261
Property and equipment held for sale                                            6,143          7,608
Income taxes receivable                                                         3,378          3,514
Deferred loan costs                                                             1,854          2,452
Prepaid expenses and other current assets                                         464            306
                                                                       -----------------------------
       Total current assets                                                    19,556         20,955
                                                                 
                                                                 
Property and equipment, at cost, net of accumulated depreciation         
    and amortization                                                           95,465         98,188
Intangibles, net of accumulated amortization                                   12,050         12,284
Deferred loan costs - less current portion                                      2,327          3,900
Deposits and other non-current assets                                             677            783
                                                                       -----------------------------
                                                                            $ 130,075      $ 136,110
                                                                      ==============================
                                                     
7</TABLE>






























See Notes to Condensed Consolidated Financial Statements


                                       3

<PAGE>

                       CHECKERS DRIVE-IN RESTAURANTS, INC.
                                AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)
                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                               (Unaudited)
                                                                                 March 24,        December 30,
                                                                                   1997              1996
                                                                             ----------------------------------
<S>                                                                          <C>                   <C>  
Current Liabilities:

Short term debt                                                              $          --         $    2,500
Current installments of long-term debt                                               7,662              9,589
Accounts payable                                                                     8,354             15,142
Accrued wages, salaries and benefits                                                 2,238              2,528
Reserves for restructuring, restaurant relocations and abandoned sites               3,688              3,800
Other Accrued liabilities                                                           12,525             13,784
Deferred income                                                                        377                337
                                                                             ----------------------------------
       Total current liabilities                                                    34,844             47,680


Long-term debt, less current installments                                           32,020             39,906
Deferred franchise fee income                                                          486                466
Minority interests in joint ventures                                                 1,373              1,455
Other noncurrent liabilities                                                         6,743              6,263
                                                                             ----------------------------------
       Total liabilities                                                            75,466             95,770


Stockholders' Equity:

Preferred stock, $.001 par value, authorized 2,000,000 shares, issued and
    outstanding 87,719 at March 24, 1997 (none at December 30, 1996)                     0                 --
Common stock, $.001 par value, authorized 100,000,000 shares, issued
    and outstanding 60,540,409 at March 24, 1997 and 51,768,480 at
    December 30, 1996                                                                   61                 52
Additional paid-in capital                                                         109,780             90,339
Warrants to be issued in settlement of litigation                                    9,463              9,463
Retained earnings                                                                  (64,295)           (59,114)
                                                                             ----------------------------------
                                                                                    55,009             40,740
Less treasury stock, at cost, 578,904 shares                                           400                400
                                                                             ----------------------------------
       Net stockholders' equity                                                     54,609             40,340
                                                                             ----------------------------------
                                                                             $     130,075         $  136,110
                                                                             ==================================
</TABLE>























See Notes to Condensed Consolidated Financial Statements

                                       4

<PAGE>


                     CHECKERS DRIVE-IN RESTAURANTS, INC.
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands except per share amounts)
                                 (UNAUDITED)



                                                             Quarter Ended
                                                
                                                        March 24,     March 25,
                                                          1997           1996
                                                   -----------------------------
                                                
REVENUES:                                       
                                                
Net restaurant sales                                    $  32,448     $  36,209
Franchise revenues and fees                                 1,612         2,099
Modular restaurant packages                                    97           115
                                                   -----------------------------
Total revenues                                             34,157        38,423
                                                   -----------------------------
                                                
COSTS AND EXPENSES:                             
                                                
Restaurant food and paper costs                            11,105        12,383
Restaurant labor costs                                     11,338        12,451
Restaurant occupancy expense                                2,725         2,663
Restaurant depreciation and amortization                    1,928         2,002
Advertising expense                                         1,645           861
Other restaurant operating expense                          3,246         2,820
Costs of modular restaurant package revenues                   76           349
Other depreciation and amortization                           519           794
General and administrative expenses                         3,393         3,385
                                                   -----------------------------
    Total costs and expenses                               35,975        37,708
                                                   -----------------------------
    Operating (loss) income                                (1,818)          715
                                                   -----------------------------
                                                
OTHER INCOME (EXPENSE):                         
                                                
Interest income                                                78           156
Interest expense                                           (1,342)       (1,217)
Interest - loan cost amortization                          (2,170)          (35)
                                                   -----------------------------
  Loss before minority interests and income     
     tax expense (benefit)                                 (5,252)         (381)
Minority interests                                            (71)           26
                                                   -----------------------------
Loss before income tax benefit                             (5,181)         (407)
Income tax benefit                                             --          (155)
                                                   -----------------------------
  Net loss                                              $  (5,181)      $  (252)
                                                   =============================
                                                
Net loss per common share                               $   (0.09)      $ (0.00)
                                                   =============================
Weighted average number of common shares        
outstanding                                                55,110        51,528
                                                   =============================
                                                
                                               
                                         3


<PAGE>

                       CHECKERS DRIVE-IN RESTAURANTS, INC.
                                AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                Quarter Ended

                                                                       March 24, 1997     March 25, 1996
                                                                  -------------------------------------------
<S>                                                                     <C>                <C>    
Cash flows from operating activities:

Net loss                                                                $    (5,181)       $      (252)
Adjustments to reconcile net earnings to net cash (used in)
provided by operating activities:
      Depreciation and amortization                                           2,448              2,796
      Deferred loan cost amortization                                         2,170                 35
      Provision for bad debt                                                     90                 66
      (Gain) loss on sale of property & equipment                                (4)                79
     Minority interests in (losses) earnings                                    (71)                26
Change in assets and liabilities:
     Increase in receivables                                                   (445)              (468)
     Decrease in notes receivable                                                31                  3
     Decrease, (Increase) in inventory                                          257                (58)
     (Increase), Decrease in costs and earnings in excess of
        billings on uncompleted contracts                                       (37)                46
     Decrease, (Increase) in income taxes receivable                            136               (764)
     Increase in prepaid expenses and other                                    (136)              (498)
     (Increase), Decrease in deferred income tax assets                          --                671
     Decrease, (Increase) in deposits and other noncurrent assets               106                (43)
     (Decrease), Increase in accounts payable                                (6,687)               129
     (Decrease), Increase in accrued liabilities                             (1,392)               696
     Increase, (Decrease) in deferred income                                     60               (345)
                                                                  --------------------------------------
       Net cash (used in) provided by operating activities                   (8,655)             2,119

Cash flows from investing activities:

Capital expenditures                                                           (291)            (1,435)
Proceeds from sale of assets                                                  2,214                825
                                                                  --------------------------------------
       Net cash provided by (used in) investing activities                    1,923              (610)
                                                                  --------------------------------------
Cash flows from financing activities:

Repayments on short term debt                                                (2,500)                --
Principal payments on long-term debt                                         (9,813)            (1,291)
Net proceeds from private placement                                          19,450                 --
Proceeds from investment by minority interests                                   --                285
Distributions to minority interests                                             (10)               (30)
                                                                  --------------------------------------
       Net cash provided by (used in) financing activities                    7,127             (1,036)
                                                                  --------------------------------------
       Net increase in cash                                                     395                473
Cash at beginning of period                                                   3,056              3,364
                                                                  --------------------------------------
Cash at end of period                                                     $   3,451         $    3,837
                                                                  ======================================

Supplemental disclosures of cash flow information --
        Interest paid                                                     $   1,540          $   1,314
                                                                  ======================================

</TABLE>










                                        6


<PAGE>
                       CHECKERS DRIVE-IN RESTAURANTS, INC.
                                AND SUBSIDIARIES
                         NOTES TO CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A)         BASIS  OF  PRESENTATION  -  The  accompanying   unaudited  financial
statements have been prepared in accordance with generally  accepted  accounting
principles for interim  financial  information and the instructions to Form 10-Q
and  Article 10 of  Regulation  S-X.  Accordingly,  they do not  include all the
information and notes required by generally accepted  accounting  principles for
complete  financial  statements.  In the opinion of management,  all adjustments
necessary  to  present  fairly  the  information  set  forth  therein  have been
included.  The operating  results for the quarter ended March 24, 1997,  are not
necessarily  an  indication  of the results  that may be expected for the fiscal
year ending  December 29, 1997.  Except as disclosed  herein,  there has been no
material  change in the information  disclosed in the notes to the  consolidated
financial  statements  included in the Company's  Annual Report on form 10-K for
the  year  ended  December  30,  1996.  Therefore,  it  is  suggested  that  the
accompanying  financial  statements  be read in  conjunction  with the Company's
December 30, 1996 consolidated financial statements.  As of January 1, 1994, the
Company changed from a calendar reporting year ending on December 31st to a year
which will end on the Monday  closest to December 31. Each  quarter  consists of
three 4-week  periods with the exception of the fourth quarter which consists of
four 4-week periods.

(B)         PURPOSE  AND  ORGANIZATION  - The  principal  business  of  Checkers
Drive-In  Restaurants,  Inc. (the "Company") is the operation and franchising of
Checkers  Restaurants.  At March 24, 1997,  there were 477 Checkers  Restaurants
operating in 23 different states, the District of Columbia,  and Puerto Rico. Of
those Restaurants, 232 were Company-operated (including thirteen joint ventures)
and 245 were operated by  franchisees.  The accounts of the joint  ventures have
been  included  with  those  of the  Company  in  these  consolidated  financial
statements.

            The consolidated  financial  statements also include the accounts of
all  of  the  Company's  subsidiaries,  including  Champion  Modular  Restaurant
Company,  Inc.  ("Champion").  Champion manufactures Modular Restaurant Packages
("MRP's")  primarily  for the Company and  franchisees.  Effective  February 15,
1994,  Champion  was merged  into the  Company  and is  currently  operated as a
division.  Intercompany  balances  and  transactions  have  been  eliminated  in
consolidation  and  minority  interests  have been  established  for the outside
partners' interests.

(C)         REVENUE  RECOGNITION - Franchise fees are generated from the sale of
rights  to  develop,  own and  operate  Restaurants.  Such fees are based on the
number of potential  Restaurants in a specific area which the franchisee  agrees
to develop pursuant to the terms of the franchise  agreement between the Company
and the  franchisee  and are  recognized  as  income  on a pro rata  basis  when
substantially  all of the  Company's  obligations  per location  are  satisfied,
generally at the opening of the Restaurant. Franchise fees are nonrefundable.

            The  Company  receives  royalty  fees  from  franchisees  based on a
percentage of each restaurant's  gross revenues.  Royalty fees are recognized as
earned.

            Champion recognizes revenues on the percentage-of-completion method,
measured by the percentage of costs incurred to the estimated total costs of the
contract.

(D)         CASH, AND CASH EQUIVALENTS - The Company considers all highly liquid
instruments  purchased with an original maturity of less than three months to be
cash equivalents.

(E)         RECEIVABLES  -  Receivables  consist  primarily of  franchise  fees,
royalties  and  notes due from  franchisees,  and  receivables  from the sale of
modular  restaurant  packages.  Allowances  for doubtful  receivables  were $1.8
million at March 24, 1997 and $2.2 million at December 30, 1996.

(F)         INVENTORY - Inventories  are stated at the lower of cost  (first-in,
first-out (FIFO) method) or market.

(G)         DEFERRED  LOAN COSTS - Deferred  loan costs  incurred in  connection
with the Company's  November 22, 1996 restructure of its primary credit facility
(see Note 2) are being amortized on the effective interest method.

(H)         PROPERTY AND  EQUIPMENT - Property and  equipment (P & E) are stated
at cost except for P & E that have been impaired,  for which the carrying amount
is  reduced to estimated fair value. Property and equipment under capital leases
                                        7

<PAGE>

are stated at their fair value at the inception of the lease.  Depreciation  and
amortization  are computed on  straight-line  method over the  estimated  useful
lives of the assets.

(I)         IMPAIRMENT OF LONG LIVED ASSETS - During the fourth quarter of 1995,
the Company early adopted the  Statement of Financial  Accounting  Standards No.
121,  "Accounting for the Impairment of Long-Lived  Assets and Long-Lived Assets
to be  Disposed  Of"  (SFAS  121)  which  requires  the  write-down  of  certain
intangibles and tangible property  associated with under performing sites to the
level supported by the forecasted discounted cash flow.

(J)         Goodwill  and  Non-Compete  Agreements  - Goodwill  and  non-compete
agreements are being amortized over 20 years and 3 to 7 years, respectively,  on
a straight-line basis.

(K)         INCOME  TAXES - The  Company  accounts  for income  taxes  under the
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes" (SFAS 109). Under the asset or liability method of SFAS 109, deferred tax
assets  and  liabilities   are  recognized  for  the  future  tax   consequences
attributable to differences  between the financial statement carrying amounts of
existing  assets and liabilities  and their  respective tax bases.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered  or settled.  Under SFAS 109, the effect on deferred tax assets and
liabilities  of a change in tax rates is recognized in income in the period that
includes the enactment date (see Note 4).

(L)         USE OF ESTIMATES - The  preparation  of the financial  statements in
conformity with generally accepted accounting  principles requires management to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reported period. Actual results could differ from those estimates.

(M)         DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS - The balance
sheets as of March 24,  1997 and  December  30,  1996,  reflect  the fair  value
amounts which have been  determined,  using  available  market  information  and
appropriate  valuation   methodologies.   However,   considerable  judgement  is
necessarily  required in  interpreting  market data to develop the  estimates of
fair value.  Accordingly,  the estimates  presented  herein are not  necessarily
indicative  of the amounts that the Company  could  realize in a current  market
exchange.   The  use  of  different   market   assumptions   and/or   estimation
methodologies may have a material effect on the estimated fair value amounts.

            Cash  and  cash  equivalents,  receivables,  accounts  payable,  and
short-term debt - The carrying amounts of these items are a reasonable  estimate
of their fair value.

            Long-term debt - Interest rates that are currently  available to the
Company for issuance of debt with similar  terms and  remaining  maturities  are
used to estimate fair value for debt issues that are not quoted on an exchange.

(N)         RECLASSIFICATIONS - Certain amounts in the 1996 financial statements
have been reclassified to conform to the 1997 presentation.


NOTE 2      LONG-TERM DEBT

Long-term debt consists of the following:
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                   March 24,    December 30,
                                                                                     1997            1996
                                                                               -------------------------------
<S>                                                                                <C>            <C>       
Notes payable under Loan Agreement                                                 $  26,734      $   35,818
Notes payable due at various dates, secured by buildings and equipment, with
   interest at rates primarily ranging from 9.0% to 15.83%, payable monthly            8,269           8,963
Unsecured notes payable, bearing interest at rates ranging from prime to 12%           3,481           3,481
Other                                                                                  1,198           1,233
                                                                               -------------------------------

Total long-term debt                                                                  39,682          49,495
Less current installments                                                              7,662           9,589
                                                                               -------------------------------
Long-term debt, less current installments                                         $   32,020      $   39,906
                                                                               ===============================
</TABLE>
                                        8

<PAGE>
            On July 29,  1996,  the debt  under the  Company's  prior  bank loan
agreement (the "Loan  Agreement")  and credit line ("Credit  Line") was acquired
from a bank  group by an  investor  group  led by an  affiliate  of DDJ  Capital
Management,  LLC  (collectively,  "DDJ"). The Company and DDJ began negotiations
for  restructuring  of the debt. On November 14, 1996, and prior to consummation
of a formal debt  restructuring  with DDJ, the debt under the Loan Agreement and
Credit Line was acquired from DDJ by a group of entities and  individuals,  most
of whom are engaged in the fast food  restaurant  business.  This investor group
(the "CKE Group") was led by CKE  Restaurants,  Inc., the parent of Carl Karcher
Enterprises,  Inc., Casa Bonita, Inc., and Summit Family Restaurants,  Inc. Also
participating  were most members of the DDJ Group,  as well as KCC  Delaware,  a
wholly-owned subsidiary of Giant Group, Ltd., which is a controlling shareholder
of Rally's Hamburgers, Inc. Waivers of all defaults under the Loan Agreement and
Credit Line were granted through  November 22, 1996, to provide a period of time
during which the Company and the CKE Group could  negotiate an agreement on debt
restructuring.

            On November  22,  1996,  the  Company and the CKE Group  executed an
Amended and Restated Credit Agreement (the "Restated Credit Agreement")  thereby
completing a restructuring  of the debt under the Loan  Agreement.  The Restated
Credit  Agreement  consolidated all of the debt under the Loan Agreement and the
Credit  Line into a single  obligation.  At the time of the  restructuring,  the
outstanding  principal  balance under the Loan Agreement and the Credit Line was
$35.8 million.  Pursuant to the terms of the Restated Credit Agreement, the term
of the debt was extended by one (1) year until July 31,  1999,  and the interest
rate on the  indebtedness  was reduced to a fixed rate of 13%. In addition,  all
principal payments were deferred until May 19, 1997, and the CKE Group agreed to
eliminate  certain  financial  covenants,  to  relax  others  and  to  eliminate
approximately $6 million in restructuring fees and charges.  The Restated Credit
Agreement also provided that certain  members of the CKE Group agreed to provide
to the Company a short term revolving line of credit of up to $2.5 million, also
at a fixed interest rate of 13% (the "Secondary  Credit Line"). In consideration
for the  restructuring,  the Restated Credit  Agreement  required the Company to
issue to the CKE Group warrants to purchase an aggregate of 20 million shares of
the Companys' common stock at an exercise price of $.75 per share, which was the
approximate  market price of the common stock prior to the  announcement  of the
debt transfer.  As of March 24, 1997, the Company reduced the principal  balance
under the Restated Credit Agreement by $9.1 million and has repaid the Secondary
Credit Line in full.  A portion of the funds  utilized  to make these  principal
reduction  payments were obtained by the Company from the sale of certain closed
restaurant  sites to third  parties.  Additionally,  the Company  utilized $10.5
million of the proceeds from the February 21, 1997,  private  placement which is
described later in this section.  Pursuant to the Restated Credit Agreement, the
prepayments of principal made in 1996 and early in 1997 will relieve the Company
of the  requirement to make any of the regularly  scheduled  principal  payments
under the Restructured Credit Agreement which would have otherwise become due in
fiscal year 1997. The Amended and Restated Credit  Agreement  provides  however,
that 50% of any future asset sales must be utilized to prepay principal.

            The  Company  has  outstanding  promissory  notes  in the  aggregate
principal  amount of $4.6 million (the  "Notes")  payable to  Rall-Folks,  Inc.,
Restaurant  Development Group, Inc. and Nashville Twin  Drive-Through  Partners,
L.P.  The  Company  had  agreed to  acquire  the Notes in  consideration  of the
issuance of an  aggregate  of  approximately  4,000,000  shares of Common  Stock
pursuant to purchase  agreements entered into in 1995 and subsequently  amended.
All three of the parties  received varying degrees of protection on the purchase
price of the promissory  notes.  Accordingly,  the actual number of shares to be
issued  will be  determined  by the market  price of the  Company's  stock.  The
Company was not able to consummate these transactions as scheduled. All three of
the Notes are now past due and  management  is attempting to negotiate new terms
for the repayment. The Company does not currently have sufficient cash available
to pay one or more of these notes if required to do so.

NOTE 3:       PRIVATE PLACEMENT

            On February 21, 1997, the Company completed a private placement (the
"Private  Placement") of 8,771,929 shares of the Company's  common stock,  $.001
par value, and 87,719 shares of the Company's Series A preferred stock, $114 par
value (the "Preferred Stock"). CKE Restaurants,  Inc. purchased 6,162,299 of the
Company's  common stock and 61,623 of the  Preferred  Stock and other  qualified
investors,  including  other  members  of the CKE  Group of  lenders  under  the
Restated  Credit  Agreement,  also  participated in the Private  Placement.  The
Company  received  approximately  $20  million  in  proceeds  from  the  Private
Placement. The reduction of the debt under the Restated Credit Agreement and the
Secondary  Credit Line,  both of which carry a 13% interest rate will reduce the
Company's interest expense by more than $1.3 million annually.

            The Private Placement  purchase  agreement requires that the Company
submit to its shareholders for vote at its 1997 Annual Shareholders' Meeting the
conversion of the Preferred Stock into 8,771,900  shares of the Company's common
stock. If the shareholders do not vote in favor of the conversion, the Preferred
Stock will remain  outstanding  with the rights and preferences set forth in the
Certificate  of  Designation  of Series A Preferred  Stock of the  Company  (the
"Certificate",  a copy of which is an Exhibit hereto),  including (i) a dividend













                                        9


<PAGE>

preference, (ii) a voting preference,  (iii) a liquidation preference and (iv) a
redemption  requirement.  If the  conversion of the Preferred  Stock into common
stock is not approved by the Company's  shareholders at the 1997 Annual Meeting,
the  Preferred  Stock will have the right to  receive  cash  dividends  equal to
$16.53 per share per annum  payable on a quarterly  basis  beginning  August 19,
1997.  Such  dividends  are  cumulative  and  must be paid in full  prior to any
dividends being declared or paid with respect to the Company's  common stock. If
the Company is in default with respect to any dividends on the Preferred  Stock,
then no cash  dividends  can be declared or paid with  respect to the  Company's
common  stock.  If the Company  fails to pay any two  required  dividends on the
Preferred  Stock,  then the number of seats on the Company's  Board of Directors
will be  increased by two and the holders of the  Preferred  Stock will have the
right,  voting as a separate class, to elect the Directors to fill those two new
seats,  which new  Directors  will  continue in office  until the holders of the
Preferred Stock have elected  successors or the dividend default has been cured.
In the event of any  liquidation,  dissolution  or winding up, but not including
any  consolidation or merger of the Company,  the holders of the Preferred Stock
will be entitled to receive a liquidation  preference of $114 per share plus any
accrued but unpaid dividends (the  "Liquidation  Preference").  In the event the
stockholders  do not  approve  the  conversion  of the  Preferred  Stock and the
Company  subsequently  completes a  consolidation  or merger and the result is a
change in control of the Company, then each share of the Preferred Stock will be
automatically  redeemed for an amount equal to the Liquidation  Preference.  The
Company is required  to redeem the  Preferred  Stock for an amount  equal to the
Liquidation  Preference on or before  February 12, 1999. If the redemption  does
not occur as required,  the dividend rate will increase from $16.53 per share to
$20.52 per share.  Additionally,  if there are not then Directors  serving which
were  elected by the holders of the  Preferred  Stock,  the number of  directors
constituting  the Company's  Board of Directors will be increased by two and the
holders of the  Preferred  Stock voting as a class will be entitled to elect the
Directors to fill the created vacancies.

NOTE 4:     STOCK OPTION PLANS

            In  August  1991,  the  Company  adopted  a stock  option  plan  for
employees whereby  incentive stock options,  nonqualified  stock options,  stock
appreciation  rights and restrictive  shares can be granted to eligible salaried
individuals.  An  option  may vest  immediately  as of the date of grant  and no
option  will be  exercisable  after ten years  from the date of the  grant.  All
options  expire no later than 10 years from the date of grant.  The  Company has
reserved  3,500,000  shares for issuance  under the plan.  In 1994,  the Company
adopted a stock option plan for non-employee  directors,  which provides for the
automatic  grant to each  non-employee  director  upon  election to the Board of
Directors of a  non-qualified,  ten-year  option to acquire 12,000 shares of the
Company's common stock, with the subsequent  automatic grant on the first day of
each  fiscal  year  thereafter  during  the time  such  person is  serving  as a
non-employee  director  of  a  non-qualified   ten-year  option  to  acquire  an
additional 3,000 shares of common stock. The Company has reserved 200,000 shares
for issuance  under this plan.  All such options have an exercise price equal to
the closing sale price of the common  stock on the date of grant.  One- fifth of
the  shares  of  common  stock  subject  to each  initial  option  grant  become
exercisable on a cumulative basis on each of the first five anniversaries of the
grant of such option.  One-third  of the shares of common stock  subject to each
subsequent option grant become  exercisable on a cumulative basis on each of the
first three  anniversaries  of the date of the grant of such  option.  The plans
provide that shares  granted come from the Company's  authorized but unissued or
reacquired  common  stock.  The price of the options  granted  pursuant to these
plans will not be less than 100 percent of the fair  market  value of the shares
on the date of the grant.  In August 1994,  employees  granted  $11.50,  $11.63,
$12.33 and $19.00  options were given the  opportunity  to forfeit those options
and be  granted  an option  to  purchase  a share at $5.13 for every two  option
shares  retired.  As a result of this offer,  options  for  662,228  shares were
forfeited in return for options for 331,114 shares at $5.13 per share.

            In February 1996,  employees  (excluding executive officers) granted
options in 1993 and 1994 with  exercise  prices in excess of $2.75 were  offered
the opportunity to exchange for a new option grant for a lesser number of shares
at an exercise price of $1.95,  which  represented a 25% premium over the market
price of the Company's common stock on the date the plan was approved.  Existing
options  with an  exercise  price in  excess  of $11.49  could be  cancelled  in
exchange for new options on a four to one basis.  Options with an exercise price
between  $11.49 and $2.75 could be  cancelled  in exchange  for new options on a
three for one basis.  The offer to  employees  expired  April 30, 1996 and, as a
result of this offer,  options for 49,028  shares were  forfeited  in return for
options for 15,877 shares at the $1.95 exercise price.


                                         10


<PAGE>

            During the quarter ended March 24, 1997, the Company granted 285,000
options  pursuant to the terms of the 1991 Employee Stock Option Plan referenced
above.  In addition,  the Company granted options to purchase a total of 500,000
shares  of its  common  stock  as  part  of  compensation  packages  for two new
executive officers,  which options were not granted pursuant to the terms of the
1991 Employee Stock Option Plan.

            The Company has adopted the disclosure-only  provisions of Statement
of  Financial   Accounting  Standards  No.  123,  "Accounting  for  Stock  Based
Compensation."  Accordingly,  no  compensation  cost has been recognized for the
stock option plans.  Had  compensation  cost for the Company's stock option plan
for  employees  been  determined  based on the fair  value at the grant date for
awards  in  fiscal  1996  and the  first  quarter  of 1997  consistent  with the
provisions  of SFAS No. 123, the  Company's  net earnings and earnings per share
would  have been  reduced  by  approximately  $1.4  million  and $680  thousand,
respectively,  on a pro forma  basis.  The fair  value of each  option  grant is
estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions used for grants in 1996 and the first
quarter of fiscal 1997,  respectively:  dividend  yield of zero percent for both
periods;  expected volatility of 64 and 81 percent,  risk-free interest rates of
6.5 and 6.0 percent,  and expected lives of 3.5 and 2 years,  respectively.  The
compensation  cost disclosed above may not be  representative  of the effects on
reported  income in future  quarters,  for  example,  because  options vest over
several years and additional awards are made each year.



NOTE 5:     INCOME TAXES

            The Company  recorded  income tax  benefits of $2.0  million for the
quarter  ended March 24, 1997 and $155  thousand for the quarter ended March 25,
1996, or 38.0% of the losses  before  income taxes.  The Company then recorded a
valuation  allowance of $2.0 million  against  deferred  income tax assets as of
March 24, 1997. The Company's total valuation  allowances of $28.8 million as of
March 24, 1997,  is  maintained on deferred tax assets which the Company has not
determined  to be more likely  than not  realizable  at this time.  Subject to a
review of the tax assets,  these  valuation  allowances  will be reversed during
periods in the future in which the Company records  pre-tax  income,  in amounts
necessary to offset any then recorded  income tax expenses  attributable to such
future periods.


NOTE 6:     SUBSEQUENT EVENT

            On  March  25,  1997,  Checkers  agreed  in  principle  to a  merger
transaction  pursuant to which Rally's Hamburgers,  Inc., a Delaware corporation
("Rally's"),  will  become  a  wholly-owned  subsidiary  of  Checkers.  Rally's,
together with its  franchisees,  operates  approximately  471 double  drive-thru
hamburger restaurants primarily in the midwestern United States. Under the terms
of the letter of intent executed by Checkers and Rally's,  each share of Rally's
common stock will be converted into three shares of Checkers'  Common Stock upon
consummation  of the  merger.  The  transaction  is  subject to  negotiation  of
definitive  agreements,  receipt of fairness opinions by each party,  receipt of
stockholder and other required approvals and other customary conditions.











            
                                        11


<PAGE>

ITEM 2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
            RESULTS OF OPERATIONS

INTRODUCTION

            The Company  commenced  operations on August 1, 1987, to operate and
franchise  Checkers  double  drive-thru  Restaurants.  As of March 24, 1997, the
Company had an ownership  interest in 232  Company-operated  Restaurants  and an
additional 245 Restaurants were operated by franchisees. The Company's ownership
interest in the  Company-operated  Restaurants  is in one of two forms:  (i) the
Company owns 100% of the Restaurant  (as of March 24, 1997,  there were 218 such
Restaurants)  and (ii)  the  Company  owns a  10.55%  or  65.83%  interest  in a
partnership  which owns the  Restaurant (a "Joint  Venture  Restaurant")  (as of
March 24, 1997,  there were 14 such Joint Venture  Restaurants).  (See "Business
Restaurant Operations - Joint Venture Restaurants" in Item 1 of this Report.)

            The  Company  has begun to see the  positive  effects of  aggressive
programs  implemented  at the  beginning  of fiscal  1997 that are  designed  to
improve  food,  paper  and  labor  costs.  These  costs  totalled  69.2%  of net
restaurant  revenues in the first  quarter of 1997,  compared  to 65.6%,  69.3%,
73.3% and 75.9% of net  restaurant  revenues  in the  first,  second,  third and
fourth  quarters of fiscal 1996,  despite an 8.8% decrease in Company owned same
store sales in the first quarter of 1997 as compared to the first quarter of the
prior year. Even more significantly,  the costs of sales trended downward during
each of the three four week  periods of the first  quarter  of fiscal  1997.  We
expect to see further  reductions in the cost of sales  percentage in the second
quarter of 1997.  Although the Company's operating margins for the first quarter
of 1997 were  better  than the  annualized  margins  for fiscal  year 1996,  the
Company  intends to continue to  implement  programs  to further  improve  those
margins.  However,  since Company owned average  Restaurant  sales for the first
quarter of 1997 decreased 8.8% from comparable  Company owned average Restaurant
sales in the first  quarter  of 1996,  the  Company  is also  devising  programs
intended to improve  sales.  Plans are being  developed to test a new  marketing
strategy  in July 1997 in one or two of our  regions.  On a current  basis,  new
product  introduction and fresh  advertising  campaigns,  along with a continued
focus  on  guest  service,  are all  part  of the  Company's  sales  improvement
programs.

            As  of  March  1996,  the  Company  had  53  Company  and  franchise
Restaurants  testing its proprietary  L.A. Mex Mexican brand.  Although  initial
sales  were  encouraging,   the  sales  increases   resulted  in  little  or  no
contribution  to the  profitability  of the test units.  Additionally,  speed of
service was adversely  impacted by the addition of the L.A. Mex  products.  As a
result, the Company closed a majority of the tests in early fiscal 1997.

            In February  1997,  the Company  completed a private  placement (the
"Private  Placement") of 8,771,929 shares of the Company's  common stock,  $.001
par value, and 87,719 shares of the Company's  Series A preferred  stock,  $.001
par value (the "Preferred Stock"). CKE Restaurants,  Inc. purchased 6,162,299 of
the Company's common stock and 61,623 of the Preferred Stock and other qualified
investors,  including  other  members  of the CKE  Group of  lenders  under  the
Restated  Credit  Agreement,  also  participated in the Private  Placement.  The
Company  received  approximately  $20  million  in  proceeds  from  the  Private
Placement.  The  Company  used $8 million of the Private  Placement  proceeds to
reduce the  principal  balance due under the  Restated  Credit  Agreement;  $2.5
million was  utilized  to repay the  Secondary  Credit  Line;  $2.3  million was
utilized to pay outstanding balances to various key food and paper distributors;
and the remaining amount was used primarily to pay down outstanding balances due
certain  other  vendors.  The  reduction of the debt under the  Restated  Credit
Agreement and the Secondary Credit Line, both of which carry a 13% interest rate
will reduce the Company's interest expense by more than $1.3 million annually.

            Significant management changes have occurred since the end of fiscal
year  1996.  On January 6, 1997,  Richard  E.  Fortman  was  elected to serve as
President  and Chief  Operating  Officer of the  Company and Joseph N. Stein was
elected to serve as Executive Vice President and Chief Administrative Officer of
the  Company.  Effective  January  21,  1997,  Michael E. Dew  resigned  as Vice
President of Company  Operations.  Effective  that same date,  Michael T. Welch,
Vice  President  of  Operations,  Marketing,  Restaurant  Support  Services  and
Research &  Development  assumed  the  additional  duties of Vice  President  of
Company  Operations.  On January 24,  1997,  James T.  Holder,  Chief  Financial
Officer and  Secretary  of the Company  was  promoted to Senior Vice  President,
General  Counsel and  Secretary  of the Company and Joseph N. Stein  assumed the
additional duties of Chief Financial  Officer.  Mr. Fortman brings over 27 years
of experience in the operation of quick service restaurants to the Company.


                                       12


<PAGE>


            In the first  quarter of fiscal 1997,  the  Company,  along with its
franchisees,  experienced  a net  reduction  of one  (1)  operating  Restaurant,
compared to a net increase of two (2) operating Restaurants in the first quarter
of fiscal 1996. Based on information obtained from the Company's franchisees, in
1997, the franchise  community  expects to open  approximately 30 new units. The
Company does not  currently  expect  significant  further  Restaurant  closures,
choosing  instead  to focus  on  improving  Restaurant  margins.  The  Company's
franchisees  as a whole  continue to experience  higher  average per store sales
than Company Restaurants.

            This  Quarterly   Report  on  Form  10-Q  contains  forward  looking
statements,  which are subject to known and  unknown  risks,  uncertainties  and
other factors which may cause the actual results,  performance,  or achievements
of the Company to be materially  different from any future results,  performance
or achievements  expressed or implied by such forward-looking  statements.  Such
factors  include,  among others,  the following:  general  economic and business
conditions; the impact of competitive products and pricing; success of operating
initiatives;    advertising   and   promotional   effort;   adverse   publicity;
availability,  changes in business  strategy or  development  plans;  quality of
management;  availability,  terms and  deployment  of  capital;  the  results of
financing efforts;  food, labor, and employee benefit costs;  changes in, or the
failure to comply with, government regulations; weather conditions; construction
schedules;  and risks that sales growth resulting from the Company's current and
future   remodeling  and   dual-branding  of  restaurants  and  other  operating
strategies can be sustained at the current levels experienced.






































                                       13


<PAGE>

RESULTS OF OPERATIONS

            The following table sets forth the percentage  relationship to total
revenues of the listed items included in the Company's  Consolidated  Statements
of Operations.  Certain items are shown as a percentage of Restaurant  sales and
Modular Restaurant  Package revenue.  The table also sets forth certain selected
restaurant operating data.
                                                            Quarter Ended
                                                             (Unaudited)
                                                    ---------------------------
                                                        March 24,    March 25,
                                                          1997         1996
                                                    ---------------------------
Revenues:
    Net restaurant sales                                    95.0%        94.2%
    Franchise revenues and fees                              4.7%         5.5%
    Modular restaurant packages                              0.3%         0.3%
                                                    ---------------------------

          Total revenue                                      100%         100%

Costs and Expenses:
    Restaurant food and paper costs (1)                     34.2%        34.2%
    Restaurant labor costs (1)                              34.9%        34.4%
    Restaurant occupancy expense (1)                         8.4%         7.4%
    Restaurant depreciation and amortization (1)             5.9%         5.5%
    Advertising expense (1)                                  5.1%         2.4%
    Other restaurant operating expense (1)                  10.0%         7.8%
    Costs of modular restaurant package revenues(2)         77.7%       304.5%
    Other depreciation and amortization                      1.5%         2.1%
    Selling, general and administrative expense              9.9%         8.8%
                                                    ---------------------------
           Operating (loss) income                          (5.3%)        1.9%
                                                    ---------------------------
Other income (expense):
    Interest income                                          0.2%         0.4%
    Interest expense                                        (3.9%)       (3.2%)
    Interest - loan cost amortization                       (6.4%)       (0.1%)
    Minority interests                                       0.2%        (0.1%)
                                                    ---------------------------
       Loss before income tax benefit                      (15.2%)       (1.1%)
    Income tax expense (benefit)                             0.0%        (0.4%)
                                                    ---------------------------
       Net loss                                            (15.2%)       (0.7%)
                                                    ===========================
Operating data:
    System-wide restaurant sales (in 000's):
       Company-operated                                 $  32,448    $  36,209
       Franchised                                          39,598       41,292
                                                    ---------------------------
             Total                                      $  72,046    $  77,501
                                                    ===========================

Average annual net sales per restaurant open for a full year (in 000's) (3):

                                                       1997          1996
                                               ----------------------------

 Company-operated                                       $634          $693
    Franchised                                          $767          $793
    System-wide                                         $699          $742
                                               ----------------------------
Number of Restaurants (4)
    Company-operated                                     232           247
    Franchised                                           245           254
                                               ----------------------------
         Total                                           477           501
                                               ============================

(1)  As a percent of net restaurant sales.
(2)  As a percent of Modular restaurant package revenues.
(3)  Includes  sales  of  Restaurants  open  for  entire trailing 13 period year
     including stores expected to be closed in the following year.
(4)  Number of Restaurants open at end of period.



                                         14


<PAGE>
COMPARISON  OF  HISTORICAL  RESULTS - QUARTER  ENDED  MARCH 24, 1997 AND QUARTER
ENDED MARCH 25, 1996

            REVENUES.  Total revenues  decreased  11.1% to $34.2 million for the
quarter  ended March 24, 1997,  compared to $38.4  million for the quarter ended
March 25, 1996.  Company-operated  net restaurant sales decreased 10.4% to $32.4
million for the quarter ended March 24, 1997, from $36.2 million for the quarter
ended  March  25,  1996.  Net  restaurant  sales  for  comparable  Company-owned
Restaurants for the quarter ended March 24, 1997, decreased 8.8% compared to the
quarter ended March 25, 1996.  Comparable  Company-owned  Restaurants  are those
continuously  open  during  both  reporting  periods.  These  decreases  in  net
restaurant sales and comparable net restaurant sales are primarily  attributable
to fewer discounting and television  promotions in the first quarter of 1997 and
the  Company's  1997 focus on cutting  costs and  developing  a new  advertising
campaign for the remainder of 1997.

            Franchise  revenues and fees decreased 23.2% to $1.6 million for the
quarter ended March 24, 1997,  from $2.1 million for the quarter ended March 25,
1996. This was a result of a net reduction of nine franchised  restaurants since
March 25, 1996,  and opening  fewer  franchised  Restaurants  during the quarter
ended March 24, 1997, than in the first quarter of 1996. The Company  recognizes
franchise  fees as revenues  when the Company has  substantially  completed  its
obligations  under  the  franchise  agreement,  usually  at the  opening  of the
franchised Restaurant.

            Modular  restaurant package revenues decreased 15.2% to $97 thousand
for the quarter  ended March 24, 1997,  from $115 thousand for the quarter ended
March 25,  1996.  Modular  restaurant  package  revenues are  recognized  on the
percentage of completion method during the construction  process;  therefore,  a
substantial  portion of the modular  restaurant  package  revenues and costs are
recognized  prior to the opening of a  Restaurant  or shipment to a  convenience
store operator.

            COSTS AND EXPENSES.  Restaurant  food and paper costs totalled $11.1
million or 34.2% of net  Restaurant  sales for the quarter ended March 24, 1997,
compared to $12.4 million or 34.2% of net restaurant sales for the quarter ended
March 25, 1996. The actual decrease in food and paper costs was due primarily to
the decrease in net restaurant sales.

            Restaurant  labor  costs,  which  includes   restaurant   employees'
salaries,  wages, benefits and related taxes, totalled $11.3 million or 34.9% of
net  restaurant  sales for the quarter  ended March 24, 1997,  compared to $12.5
million or 34.4% of net  restaurant  sales for the quarter ended March 25, 1996.
The increase in restaurant  labor costs as a percentage of net restaurant  sales
was due primarily to the decline in average gross  restaurant  sales relative to
the  fixed and  semi-variable  nature of these  costs  and the  increase  in the
federal minimum wage rate.

            Restaurant  occupancy expense,  which includes rent, property taxes,
licenses and insurance,  totalled $2.7 million or 8.4% of net  restaurant  sales
for the quarter  ended March 24,  1997,  compared to $2.7 million or 7.4% of net
restaurant  sales  for the  quarter  ended  March 25,  1996.  This  increase  in
restaurant  occupancy  costs as a  percentage  of net  restaurant  sales was due
primarily to the decline in average gross restaurant sales relative to the fixed
and  semi-variable  nature of these expenses and the acquisition of interests in
12 Restaurants in the high cost Chicago market in the second quarter of 1996.

            Restaurant  depreciation  and  amortization  decreased  3.7% to $1.9
million for the quarter ended March 24, 1997,  from $2.0 million for the quarter
ended March 25, 1996, due primarily to fourth quarter 1996 impairments under the
Statement of  Financial  Accounting  Standards  No. 121 and a net decrease of 15
Company-operated restaurants from March 25, 1996, to March 24, 1997.

            Advertising  expense  increased  to  $1.6  million  or  5.1%  of net
restaurant  sales for the quarter  ended March 24, 1997,  from $862  thousand or
2.4% of net restaurant  sales for the quarter ended March 25, 1996. The increase
in  this  expense  was  due to  decreased  utilization  of  coupons  in  lieu of
advertising  dollars  in 1997  and the  first  quarter  1996  capitalization  of
television production costs that were later written off in 1996.

            Other  restaurant  expenses  includes  all  other  Restaurant  level
operating expenses other than food and paper costs, labor and benefits, rent and
other  occupancy  costs which include  utilities,  maintenance  and other costs.
These expenses  totalled $3.2 million or 10.0% of net  restaurant  sales for the
quarter  ended  March  24,  1997,  compared  to $2.8  million  or 7.8% of  gross
restaurant  sales for the quarter  ended  March 25,  1996.  The  increase in the
quarter  ended March 24,  1997,  as a  percentage  of net  restaurant  sales was
primarily related to the decline in average net restaurant sales relative to the
fixed and  semi-variable  nature of these  expenses.  The increase in the actual
expense by 15.1% was primarily due to certain  one-time  credits recorded in the
first quarter of 1996.
                                       15

<PAGE>
            Costs of modular  restaurant  package revenues totalled $75 thousand
or 77.7% of modular  restaurant package revenues for the quarter ended March 24,
1997, compared to $349 thousand or 304.5% of such revenues for the quarter ended
March 25,  1996.  The  decrease  in these  expenses as a  percentage  of modular
restaurant  package  revenues was  attributable  to the  elimination  of various
excess fixed costs in the first quarter of 1997.

            General and  administrative  expenses  were $3.4  million or 9.9% of
total revenues,  for the quarter ended March 24, 1997,  compared to $3.4 million
or 8.8% of total revenues for the quarter ended March 25, 1996.

            INTEREST EXPENSE. Interest expense increased to $1.3 million or 3.9%
of total  revenues for the quarter  ended March 24,  1997,  from $1.2 million or
3.2% of total  revenues for the quarter ended March 25, 1996.  This increase was
due to an increase in the  Company's  effective  interest  rates since the first
quarter of 1996, partially offset by a reduction in the weighted average balance
of debt outstanding during the respective periods.

            INCOME TAX  BENEFIT.  Due to the loss for the  quarter,  the Company
recorded an income tax benefit of  $1,967,000 or 38.0% of the loss before income
taxes which was completely  offset by a deferred income tax valuation  allowance
of $1,967,000 for the quarter ended March 24, 1997, as compared to an income tax
benefit  of $155  thousand  or 38.0% of  earnings  before  income  taxes for the
quarter  ended March 25, 1996.  The effective tax rates differ from the expected
federal tax rate of 35.0% due to state income taxes and job tax credits.

            NET LOSS.  Earnings were significantly  impacted by the expensing of
$2.2  million  in  deferred  loan costs in the  quarter  ended  March 24,  1997,
required  as a result of  principal  payments of $9.1  million on the  Company's
primary  credit  facility.  Net  loss  before  tax and the  deferred  loan  cost
amortization  was $3.0 million or $.05 per share for the quarter ended March 24,
1997, and $372,000 or $.01 per share for the quarter ended March 25, 1996, which
resulted  primarily  from a decrease  in the average  net  restaurant  sales and
margins, and a decrease in royalties and franchise fees.


LIQUIDITY AND CAPITAL RESOURCES


            On July 29,  1996,  the debt  under the  Company's  prior  bank loan
agreement (the "Loan  Agreement")  and credit line ("Credit  Line") was acquired
from a Bank  Group by an  investor  group  led by an  affiliate  of DDJ  Capital
Management, LLC (collectively,  "DDJ"). On November 14, 1996, the debt under the
Loan  Agreement and Credit Line was acquired from DDJ by a group of entities and
individuals, most of whom are engaged in the fast food restaurant business. This
investor group (the "CKE Group") was led by CKE Restaurants, Inc., the parent of
Carl  Karcher   Enterprises,   Inc.,  Casa  Bonita,   Inc.,  and  Summit  Family
Restaurants, Inc. Also participating were most members of the DDJ Group, as well
as KCC Delaware Company,  a wholly-owned  subsidiary of GIANT GROUP, LTD., which
is a controlling shareholder of Rally's Hamburgers, Inc.

            On November  22,  1996,  the  Company and the CKE Group  executed an
Amended and Restated Credit Agreement (the "Restated Credit Agreement")  thereby
completing a restructuring  of the debt under the Loan  Agreement.  The Restated
Credit  Agreement  consolidated all of the debt under the Loan Agreement and the
Credit  Line into a single  obligation.  At the time of the  restructuring,  the
outstanding  principal  balance under the Loan Agreement and the Credit Line was
$35.8 million.  Pursuant to the terms of the Restated Credit Agreement, the term
of the debt was extended by one (1) year until July 31,  1999,  and the interest
rate on the  indebtedness  was reduced to a fixed rate of 13%. In addition,  all
principal payments were deferred until May 19, 1997, and the CKE Group agreed to
eliminate  certain  financial  covenants,  to  relax  others  and  to  eliminate
approximately $6 million in restructuring fees and charges.  The Restated Credit
Agreement also provided that certain  members of the CKE Group agreed to provide
to the Company a short term revolving line of credit of up to $2.5 million, also
at a fixed interest rate of 13% (the "Secondary  Credit Line"). In consideration
for the  restructuring,  the Restated Credit  Agreement  required the Company to
issue to the members of the CKE Group  warrants to purchase an  aggregate  of 20
million  shares of the Companys'  common stock at an exercise  price of $.75 per
share,  which was the approximate  market price of the common stock prior to the
announcement of the debt transfer. As of March 24, 1997, the Company has reduced
the principal  balance under the Restated  Credit  Agreement by $9.1 million and
has repaid the Secondary Credit Line in full. A portion of the funds utilized to
make these  principal  reduction  payments were obtained by the Company from the
sale of certain  closed  restaurant  sites to third parties.  Additionally,  the
Company  utilized  $10.5  million of the  proceeds  from the  February 21, 1997,
private  placement  which is described  later in this  section.  Pursuant to the
Restated Credit  Agreement,  the prepayments of principal made in 1996 and early
in 1997 will relieve the Company of the requirement to make any of the regularly
scheduled principal payments under the Restructured Credit Agreement which would
have otherwise become due in fiscal year 1997.
                                         16

<PAGE>
            The  Company  has  outstanding  promissory  notes  in the  aggregate
principal  amount of $4.6 million (the  "Notes")  payable to  Rall-Folks,  Inc.,
Restaurant  Development Group, Inc. and Nashville Twin  Drive-Through  Partners,
L.P.  The  Company  had  agreed to  acquire  the Notes in  consideration  of the
issuance of an  aggregate  of  approximately  4,000,000  shares of Common  Stock
pursuant to purchase  agreements entered into in 1995 and subsequently  amended.
All three of the parties  received varying degrees of protection on the purchase
price of the promissory  notes.  Accordingly,  the actual number of shares to be
issued will be determined by the market price of the Company's  stock. All three
of these transactions are complicated and have been disclosed in detail in prior
filings, and copies of all of the agreements are on file with the Securities and
Exchange  Commission.  The Company was not able to consummate these transactions
as  scheduled.  All  three  of the  Notes  are now past  due and  management  is
attempting  to  negotiate  new terms for the  repayment.  The  Company  does not
currently  have  sufficient  cash available to pay one or more of these notes if
required to do so.

            The Company  currently does not have significant  development  plans
for additional Company Restaurants during fiscal 1997.

            On February 21, 1997, the Company completed a private placement (the
"Private  Placement") of 8,771,929 shares of the Company's  common stock,  $.001
par value, and 87,719 shares of the Company's  Series A preferred  stock,  $.001
par value (the "Preferred Stock"). CKE Restaurants,  Inc. purchased 6,162,299 of
the Company's common stock and 61,623 of the Preferred Stock and other qualified
investors,  including  other  members  of the CKE  Group of  lenders  under  the
Restated  Credit  Agreement,  also  participated in the Private  Placement.  The
Company  received  approximately  $20  million  in  proceeds  from  the  Private
Placement.  The  Company  used $8 million of the Private  Placement  proceeds to
reduce the  principal  balance due under the  Restated  Credit  Agreement;  $2.5
million was  utilized  to repay the  Secondary  Credit  Line;  $2.3  million was
utilized to pay outstanding balances to various key food and paper distributors;
and the remaining amount was used primarily to pay down outstanding balances due
certain  other  vendors.  The  reduction of the debt under the  Restated  Credit
Agreement and the Secondary Credit Line, both of which carry a 13% interest rate
will reduce the Company's interest expense by more than $1.3 million annually.

            The Private Placement  purchase  agreement requires that the Company
submit to its shareholders for vote at its 1997 Annual Shareholders' Meeting the
conversion of the Preferred Stock into 8,771,900  shares of the Company's common
stock. If the shareholders do not vote in favor of the conversion, the Preferred
Stock will remain  outstanding  with the rights and preferences set forth in the
Certificate  of  Designation  of Series A Preferred  Stock of the  Company  (the
"Certificate",  a copy of which is an Exhibit hereto),  including (i) a dividend
preference, (ii) a voting preference,  (iii) a liquidation preference and (iv) a
redemption  requirement.  If the  conversion of the Preferred  Stock into common
stock is not approved by the Company's  shareholders at the 1997 Annual Meeting,
the  Preferred  Stock will have the right to  receive  cash  dividends  equal to
$16.53 per share per annum  payable on a quarterly  basis  beginning  August 19,
1997.  Such  dividends  are  cumulative  and  must be paid in full  prior to any
dividends being declared or paid with respect to the Company's  common stock. If
the Company is in default with respect to any dividends on the Preferred  Stock,
then no cash  dividends  can be declared or paid with  respect to the  Company's
common  stock.  If the Company  fails to pay any two  required  dividends on the
Preferred  Stock,  then the number of seats on the Company's  Board of Directors
will be  increased by two and the holders of the  Preferred  Stock will have the
right,  voting as a separate class, to elect the Directors to fill those two new
seats,  which new  Directors  will  continue in office  until the holders of the
Preferred Stock have elected  successors or the dividend default has been cured.
In the event of any  liquidation,  dissolution  or winding up, but not including
any  consolidation or merger of the Company,  the holders of the Preferred Stock
will be entitled to receive a liquidation  preference of $114 per share plus any
accrued but unpaid dividends (the  "Liquidation  Preference").  In the event the
stockholders  do not  approve  the  conversion  of the  Preferred  Stock and the
Company  subsequently  completes a  consolidation  or merger and the result is a
change in control of the Company, then each share of the Preferred Stock will be
automatically  redeemed for an amount equal to the Liquidation  Preference.  The
Company is required  to redeem the  Preferred  Stock for an amount  equal to the
Liquidation  Preference on or before  February 12, 1999. If the redemption  does
not occur as required,  the dividend rate will increase from $16.53 per share to
$20.52 per share.  Additionally,  if there are not then Directors  serving which
were  elected by the holders of the  Preferred  Stock,  the number of  directors
constituting  the Company's  Board of Directors will be increased by two and the
holders of the  Preferred  Stock voting as a class will be entitled to elect the
Directors to fill the created vacancies.

            In the fiscal year ended  December  30,  1996,  the  Company  raised
approximately  $1.8  million  from the sale of  various  of its  assets to third
parties,  including  both  personal  and excess  real  property  from  closed or
undeveloped Restaurant locations.  Under the terms of the Loan Agreement and the
Restated  Credit  Agreement,  approximately  50% of those  sales  proceeds  were
utilized to reduce outstanding principal. The Company also received $3.5 million
in connection with the reduction of a note receivable which funds were generally
used to supplement working capital. As of December 30, 1996, the Company owns or
leases  approximately  47 parcels of excess  real  property  which it intends to
continue  to  aggressively  market to third  parties,  and has an  inventory  of
approximately 36 used MRP's which it intends to continue to aggressively  market
to  franchisees  and third  parties.  There can be no assurance that the Company








                                         17


<PAGE>
will be successful  in disposing of these  assets,  and 50% of the proceeds from
the sale of excess real property  must be used to reduce the  principal  balance
under the Restated Credit Agreement.

            The Company has negative  working  capital of $15.3 million at March
24, 1997 (determined by subtracting current liabilities from current assets). It
is anticipated  that the Company will continue to have negative  working capital
since  approximately  85% of  the  Company's  assets  are  long-term  (property,
equipment,  and  intangibles),  and since all operating trade payables,  accrued
expenses,  and property and equipment  payables are current  liabilities  of the
Company.  The Company has not reported a profit for any quarter since  September
1994.

            The Company  implemented  aggressive  programs at the  beginning  of
fiscal  year 1997  designed  to  improve  food,  paper  and  labor  costs in the
Restaurants.  These costs totalled 69.2% of net restaurant revenues in the first
quarter of 1997,  compared to 72.1% of net  restaurant  revenues in fiscal 1996,
despite an 8.8%  decrease in Company owned same store sales in the first quarter
of 1997 as compared to the first  quarter of the prior  year.  The Company  also
reduced the  corporate  and regional  staff by 32 employees in the  beginning of
fiscal year 1997.  Overall,  the Company  believes  fundamental  steps have been
taken to improve the Company's profitability, but there can be no assurance that
it will be able to do so.  Management  believes that cash flows  generated  from
operations  and the  Private  Placement  should  allow the  Company  to meet its
financial  obligations  and to pay operating  expenses in fiscal year 1997.  The
Company  must,  however,  also  successfully  consummate  the  purchase  of  the
Rall-Folks  Notes,  the RDG Note and the NTDT  Note  for  Common  Stock.  If the
Company is unable to consummate  one or more of those  transactions,  and if the
Company is thereafter  unable to reach some other  arrangements with Rall Folks,
RDG or NTDT,  the  Company may default  under the terms of the  Restated  Credit
Agreement.  In that event,  the Company would seek financing from one or more of
its  current  lenders  or other  third  parties to satisfy  its  obligations  to
Rall-Folks,  RDG and NTDT,  although no assurance  can be given that the Company
would be successful in those efforts.

            The Company's prior operating results are not necessarily indicative
of future results.  The Company's future operating  results may be affected by a
number of factors,  including:  uncertainties  related to the  general  economy;
competition;  costs of food and labor; the Company's  ability to obtain adequate
capital and to  continue  to lease or buy  successful  sites and  construct  new
Restaurants;  and the Company's ability to locate capable franchisees. The price
of the Company's  common stock can be affected by the above.  Additionally,  any
shortfall in revenue or earnings  from levels  expected by  securities  analysts
could have an immediate and  significant  adverse effect on the trading price of
the Company's common stock in a given period.

COMPETITION

            The  Company's  Restaurant  operations  compete  in  the  fast  food
industry,  which is highly competitive with respect to price,  concept,  quality
and  speed  of  service,  Restaurant  location,  attractiveness  of  facilities,
customer  recognition,  convenience  and food quality and variety.  The industry
includes  many  fast  food  chains,   including   national   chains  which  have
significantly  greater  resources  than  the  Company  that  can be  devoted  to
advertising,  product development and new Restaurants.  In certain markets,  the
Company will also compete with other quick-service  double drive-thru  hamburger
chains with operating concepts similar to the Company. The fast food industry is
often  significantly  affected  by many  factors,  including  changes  in local,
regional or national  economic  conditions  affecting  consumer spending habits,
demographic  trends and traffic  patterns,  changes in consumer taste,  consumer
concerns about the nutritional  quality of  quick-service  food and increases in
the  number,  type and  location of  competing  quick-service  Restaurants.  The
Company competes primarily on the basis of speed of service,  price, value, food
quality and taste. In addition, with respect to selling franchises,  the Company
competes with many franchisors of Restaurants and other business  concepts.  All
of  the  major  chains  have  increasingly   offered  selected  food  items  and
combination  meals,   including   hamburgers,   at  temporarily  or  permanently
discounted  prices.  Beginning  generally in the summer of 1993,  the major fast
food  hamburger  chains began to intensify  the promotion of value priced meals,
many specifically  targeting the 99(cent) price point at which the Company sells
its quarter pound "Champ Burger(R)".  This promotional activity has continued at
increasing levels, and management  believes that it has had a negative impact on
the Company's sales and earnings. Increased competition,  additional discounting
and changes in marketing  strategies by one or more of these  competitors  could
have an adverse  effect on the  Company's  sales and  earnings  in the  affected
markets.

            With  respect  to  its  Modular  Restaurant  Packages,  the  Company
competes  primarily on the basis of price and speed of  construction  with other
modular construction  companies as well as traditional  construction  companies,
many of which have significantly greater resources than the Company.
                                       18

<PAGE>


SFAS 121

            The Company must examine its assets for potential  impairment  where
circumstances  indicate  that such  impairment  may exist,  in  accordance  with
Generally  Accepted  Accounting   Principles  and  the  Statement  of  Financial
Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of Long-Lived
Assets and Long-Lived Assets to be Disposed Of" ("SFAS 121"). As a retailer, the
Company  believes  such  examination  requires  the  operations  and store level
economics of individual  restaurants be evaluated for potential impairment.  The
Company recorded significant  write-downs of its assets in the fourth quarter of
fiscal year 1995 and during  fiscal year 1996 pursuant to SFAS 121. No assurance
can be given that even an overall  return to  profitability  will  preclude  the
write-down of assets  associated with the operation of an individual  restaurant
or restaurants in the future.


GOVERNMENT REGULATIONS

            The  Company  has no  material  contracts  with  the  United  States
government or any of its agencies.

            The restaurant industry  generally,  and each  Company-operated  and
franchised Restaurant  specifically,  are subject to numerous federal, state and
local  government  regulations,  including those relating to the preparation and
sale of food and those relating to building, zoning, health,  accommodations for
disabled members of the public, sanitation, safety, fire, environmental and land
use  requirements.  The Company  and its  franchisees  are also  subject to laws
governing   their   relationship   with   employees,   including   minimum  wage
requirements,  accommodation  for  disabilities,  overtime,  working  and safety
conditions  and  citizenship  requirements.  The  Company  is  also  subject  to
regulation  by the FTC and certain  laws of States and foreign  countries  which
govern  the  offer  and  sale  of  franchises,   several  of  which  are  highly
restrictive.  Many State franchise laws impose  substantive  requirements on the
franchise agreement,  including limitations on noncompetition  provisions and on
provisions concerning the termination or nonrenewal of a franchise.  Some States
require that certain materials be registered before franchises can be offered or
sold in that state.  The failure to obtain or retain food  licenses or approvals
to sell  franchises,  or an increase in the minimum wage rate,  employee benefit
costs (including  costs  associated with mandated health insurance  coverage) or
other costs associated with employees could adversely affect the Company and its
franchisees.  A mandated  increase in the minimum wage rate was  implemented  in
1996 and current federal law requires an additional increase in 1997.

            The Company's construction,  transportation and placement of Modular
Restaurant  Packages  is  subject to a number of  federal,  state and local laws
governing  all  aspects  of the  manufacturing  process,  movement,  end use and
location of the building.  Many states require  approval  through state agencies
set up to govern the modular construction industry, other states have provisions
for approval at the local level.  The  transportation  of the Company's  Modular
Restaurant  Package is subject to state,  federal and local highway use laws and
regulations which may prescribe size,  weight,  road use limitations and various
other  requirements.  The  descriptions  and  the  substance  of  the  Company's
warranties are also subject to a variety of state laws and regulations.










                                       19


<PAGE>

PART II.  OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

            Except  as  described  below,  the  Company  is not a  party  to any
material litigation and is not aware of any threatened material litigation:

            IN   RE   CHECKERS   SECURITIES   LITIGATION,    Master   File   No.
93-1749-Civ-T-17A.  On October 13, 1993, a class action  complaint  was filed in
the United  States  District  Court for the Middle  District of  Florida,  Tampa
Division,  by a  stockholder  against the  Company,  certain of its officers and
directors,  including Herbert G. Brown, Paul C. Campbell,  George W. Cook, Jared
D. Brown,  Harry S. Cline,  James M. Roche,  N. John  Simmons,  Jr. and James F.
White,  Jr.,  and KPMG Peat  Marwick,  the  Company's  auditors.  The  complaint
alleges,  generally,  that the Company  issued  materially  false and misleading
financial  statements  which were not  prepared  in  accordance  with  generally
accepted accounting  principles,  in violation of Section 10(b) and 20(a) of the
Securities  Exchange Act of 1934 and Rule 10b-5  thereunder,  and Florida common
law and  statute.  The  allegations,  including an  allegation  that the Company
inappropriately  selected the percentage of completion  method of accounting for
sales of  modular  restaurant  buildings,  are  primarily  directed  to  certain
accounting  principles followed by Champion.  The plaintiffs seek to represent a
class of all purchasers of the Company's  Common Stock between November 22, 1991
and October 8, 1993,  and seek an  unspecified  amount of damages.  Although the
Company  believes this lawsuit is unfounded and without merit, in order to avoid
further  expenses  of  litigation,  the parties  have  reached an  agreement  in
principle for the settlement of this class action.  The agreement for settlement
provides  for one of the  Company's  director  and officer  liability  insurance
carriers  and another  party to  contribute  to a fund for the purpose of paying
claims on a claims- made basis up to a total of $950,000. The Company has agreed
to contribute ten percent (10%) of claims made in excess of $475,000 for a total
potential liability of $47,500. The settlement is subject to the execution of an
appropriate stipulation of settlement and other documentation as may be required
or appropriate to obtain approval of the settlement by the Court,  notice to the
class of  pendency  of the  action  and  proposed  settlement,  and final  court
approval of the settlements.

            GREENFELDER  ET AL. V. WHITE,  ,JR.,  ET AL. On August 10,  1995,  a
state  court  complaint  was filed in the  Circuit  Court of the Sixth  Judicial
Circuit  for  Pinellas  County,  Florida,  Civil  Division,   entitled  GAIL  P.
GREENFELDER AND POWERS BURGERS,  INC. V. JAMES F. WHITE,  JR., CHECKERS DRIVE-IN
RESTAURANTS,  INC., HERBERT G. BROWN, JAMES E. MATTEI, JARED D. BROWN, ROBERT G.
BROWN  AND  GEORGE W.  COOK,  Case No.  95-4644-C1-21.  The  original  complaint
alleged, generally, that certain officers of the Company intentionally inflicted
severe emotional  distress upon Ms.  Greenfelder,  who is the sole  stockholder,
president and director of Powers Burgers,  a Checkers  franchisee.  The original
complaint  further alleged that Ms.  Greenfelder and Powers Burgers were induced
to enter into various agreements and personal  guarantees with the Company based
upon misrepresentations by the Company and its officers and the Company violated
provisions of Florida's  Franchise Act and Florida's  Deceptive and Unfair Trade
Practices Act. The original complaint alleged that the Company is liable for all
damages caused to the plaintiffs as follows: damages in an unspecified amount in
excess of $2,500,000 in connection  with the claim of intentional  infliction of
emotional  distress;  $3,000,000  or the  return of all monies  invested  by the
plaintiffs in Checkers  franchises in connection with the  misrepresentation  of
claims;  punitive  damages;  attorneys' fees; and such other relief as the court
may deem  appropriate.  The Court has  granted,  in whole or in part,  three (3)
motions to dismiss the  plaintiff's  complaint,  as amended,  including an order
entered  on  February  14,  1997,  which  dismissed  the  plaintiffs'  claim  of
intentional  infliction of emotional distress,  with prejudice,  but granted the
plaintiff's  leave to file an amended  pleading  with  respect to the  remaining
claims  set  forth in their  amended  complaint  and an  answer  to the  amended
pleading has been filed and discovery is being  conducted.  The Company believes
that this lawsuit is  unfounded  and without  merit,  and intends to continue to
defend  it  vigorously.  No  estimate  of any  possible  loss or  range  of loss
resulting from the lawsuit can be made at this time.

                                    20


<PAGE>

            CHECKERS  DRIVE-IN   RESTAURANTS,   INC.  V.  TAMPA  CHECKMATE  FOOD
SERVICES,  INC.,  ET AL. On August 10,  1995,  a state  court  counterclaim  and
third-party  complaint was filed in the Circuit Court of the Thirteenth Judicial
Circuit in and for Hillsborough County, Florida, Civil Division,  entitled TAMPA
CHECKMATE FOOD  SERVICES,  INC.,  CHECKMATE  FOOD SERVICES,  INC., AND ROBERT H.
GAGNE V. CHECKERS DRIVE-IN RESTAURANTS, INC., HERBERT G. BROWN, JAMES E. MATTEI,
JAMES F. WHITE,,  JR., JARED D. BROWN,  ROBERT G. BROWN AND GEORGE W. COOK, Case
No. 95-3869.  In the original action,  filed by the Company in July 1995 against
Mr. Gagne and Tampa Checkmate Food Services,  Inc., a company  controlled by Mr.
Gagne, the Company is seeking to collect on a promissory note and foreclose on a
mortgage  securing the promissory  note issued by Tampa Checkmate and Mr. Gagne,
and obtain  declaratory  relief  regarding the rights of the respective  parties
under Tampa Checkmate's  franchise agreement with the Company.  The counterclaim
and third party complaint allege, generally, that Mr. Gagne, Tampa Checkmate and
Checkmate Food Services,  Inc. were induced into entering into various franchise
agreements   with  and   personal   guarantees   to  the   Company   based  upon
misrepresentations  by the Company.  The  counterclaim and third party complaint
seeks damages in the amount of  $3,000,000 or the return of all monies  invested
by  Checkmate,  Tampa  Checkmate  and  Gagne in  Checkers  franchises,  punitive
damages,   attorneys'  fees  and  such  other  relief  as  the  court  may  deem
appropriate.  The  counterclaim  was  dismissed by the court on January 26, 1996
with the right to amend.  On  February  12, 1996 the  counterclaimants  filed an
amended  counterclaim  alleging violations of Florida's Franchise Act, Florida's
Deceptive  and Unfair Trade  Practices  Act,  and breaches of implied  duties of
"good faith and fair  dealings" in  connection  with a settlement  agreement and
franchise  agreement  between various of the parties.  The amended  counterclaim
seeks a  judgement  for  damages in an  unspecified  amount,  punitive  damages,
attorneys'  fees and such other  relief as the court may deem  appropriate.  The
Company has filed an answer to the amended  counterclaim  and discovery is being
conducted.  The Company  believes  that this  lawsuit is  unfounded  and without
merit,  and  intends to  continue  to defend it  vigorously.  No estimate of any
possible  loss or range of loss  resulting  from the lawsuit can be made at this
time.


ITEM 2.     CHANGES IN SECURITIES

            On February 21, 1997, the Company completed a private placement (the
"Private  Placement") of 8,771,929 shares of the Company's  common stock,  $.001
par value, and 87,719 shares of the Company's Series A preferred stock, $114 par
value (the "Preferred Stock"). CKE Restaurants,  Inc. purchased 6,162,299 of the
Company's  common stock and 61,623 of the  Preferred  Stock and other  qualified
investors,  including  other  members  of the CKE  Group of  lenders  under  the
Restated  Credit  Agreement,  also  participated in the Private  Placement.  The
Company  received  approximately  $20  million  in  proceeds  from  the  Private
Placement.  The  Company  used $8 million of the Private  Placement  proceeds to
reduce the  principal  balance due under the  Restated  Credit  Agreement;  $2.5
million was  utilized  to repay the  Secondary  Credit  Line;  $2.3  million was
utilized to pay outstanding balances to various key food and paper distributors;
and the remaining amount was used primarily to pay down outstanding balances due
certain  other  vendors.  The  reduction of the debt under the  Restated  Credit
Agreement and the Secondary Credit Line, both of which carry a 13% interest rate
will reduce the Company's interest expense by more than $1.3 million annually.



ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

            None.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None

ITEM 5.     OTHER INFORMATION

            None


                                         21

<PAGE>


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a)         Exhibits:

            27         Financial Data Schedule


(b)         Reports on 8-K:

            The  following  reports  on Form 8-K were filed  during the  quarter
            covered by this report:



                  The  Company  filed a Report  on Form 8-K with the  Commission
                  dated   January   6,  1997,   reporting   under  Item  5,  the
                  appointments  of Richard E.  Fortman  as  president  and chief
                  operating  officer and Joseph N. Stein as executive  president
                  and chief administrative officer of the Company.


                  The  Company  filed a Report  on Form 8-K with the  Commission
                  dated   January  24,  1997,   reporting   under  Item  5,  the
                  preliminary results for the fourth quarter of fiscal 1996, the
                  appointments  of James T. Holder as senior vice  president and
                  general  counsel,  Joseph N. Stein to the  additional  role of
                  chief financial officer and Michael T. Welch as vice president
                  of operations of the Company.  The Company also announced that
                  it was continuing to work on the $20 million private placement
                  of the Company's stock.


                  The  Company  filed a Report  on Form 8-K with the  Commission
                  dated February 19, 1997, reporting under Item 5, the Company's
                  receipt of $20 million in a private placement of the Company's
                  common stock and Series A preferred stock.



























                                       22


<PAGE>



SIGNATURE
---------



                  Pursuant to the requirements of the Securities Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.




                                     Checkers Drive-In Restaurants, Inc.
                                     -----------------------------------
                                                 (Registrant)


Date:   May 5, 1997







                                     By: /s/ Joseph N. Stein
                                     -----------------------------------------
                                     Joseph N. Stein
                                     Executive Vice President, Chief Financial
                                     Officer and Chief Accounting Officer


































                                       23


<PAGE>




                            March 24, 1997 FORM 10-Q
                       CHECKERS DRIVE-IN RESTAURANTS, INC.
                                  EXHIBIT INDEX







  Exhibit #      Exhibit Description
  ---------      -------------------


      27         Financial Data Schedule (included in electronic filing only).













































                                       24